repost;Other experts on this board have shot down the perpetual FOB etc argument.
And no, I don't believe shipping cost/ton would equal the total price of iron 6 years ago(ca $37/ton) or exceed price of iron 7 and more years ago(ca $32-33/ton and less)-nobody else has found any evidence for that.
Especially not when the worldwide recession has left many shipping companies hurting for orders and their ships idle-and the Handymax are the most numerous type of ship followed by Panamax,the 2 kinds of ships CWRN will be using.
Pesquero did an excellent mockup of the costs in a previous post(that may be part of ITMD's compilation in the ibox) and he is thinking of going into the iron business himself as an entrepreneur.
Considering the current worldwide shipping recession I was being generous in quoting rates for a time charter-the rates have probably decreased since the recession started in 2008.
Its also ridiculous to suggest CWRN would order and pay for an empty ship to transit to Ensenada empty from China-when there are plenty of vacant etc ships on the North American Pacific coast- but its not my life's goal to destroy/malign CWRN,so I stick to the evidence and logic.
The bottom line-companies were making a profit at $33/ton 7 years ago.
As pesquero pointed out gravel companies are making a profit at $15/ton.
With prices now ca $170/ton and still climbing that leaves a better profit margin than just about any mineral,certainly better than silver and gold the experts say. See e.g a recent post on another ihub mining board re this issue.
Btw,Texas and another nearby state(I just couldn't remember which other state but may have noted it in a previous post)allow triple trailers. I doubt CWRN would use such even though there's only one off ramp turn to my knowledge from Hwy 1 onto a secondary highway a short distance to the port,but it conveys the idea that there are more options than people generally consider.
